Heartland Investment Partners - July 2020

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THEY’RE STILL AROUND!

SUSPICIOUS LINKS AND EMAIL ADDRESSES During the past few months, people’s email inboxes have been littered with advertisements for fake coronavirus tests and cures, fake alerts from government agencies like the Centers for Disease Control and Prevention, and fake coronavirus updates. If you get an email containing an unusual link in your inbox, do not click on it — even if the email address looks legitimate. Scammers use links to spread malware on computers, which helps them get your personal information. SPELLING AND GRAMMAR MISTAKES This is usually a dead giveaway. While genuine, official updates about the coronavirus will be meticulously checked for spelling and grammar, scammers aren’t as careful. Missing periods, misspelled words, and wacky syntax errors are all hallmarks of scam emails. Make sure you carefully read any email you’re not sure about. If you can spot spelling and grammar mistakes, delete the email. Much like the coronavirus will remain in the American psyche long after cases and deaths have peaked, scammers will continue using it as a means to steal from honest, hardworking Americans. But, if we keep our guard up, we can make sure they get absolutely nothing from their efforts.

While it seems like the worst of the COVID-19 pandemic might be behind us, that doesn’t mean we should let our guard down completely — especially when it comes to internet scams designed to prey on the fear and uncertainty brought on by the pandemic. It’s no surprise that scammers have found ways to use the coronavirus scare as an opportunity to steal personal information from the vulnerable. Fortunately, you can spot coronavirus scammers using the same techniques that help identify otherwise run-of-the- mill phishing scams. REQUESTS FOR PERSONAL INFORMATION When the federal government started distributing relief checks, several scammers sent out unsolicited emails, disguised as legitimate instructions, asking for personal information from people in order to receive their $1,200. Since many people have now received their

checks, this particular scam may become less common, but always be suspicious of emails that ask for personal information, no matter the circumstances.

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I got some information yesterday on an apartment community that is “upside down.” That means the property isn’t paying its expenses, including its loan obligations. I think of properties like these as “troubled.” They could be great projects to purchase at a discount, or they could be absolute disasters! So, what do I do? Well, there are a few things I always do when looking at a real estate project that’s “troubled” or “distressed,” and I’d recommend you try them, too. Whether you’re an active or passive investor, these tips will pay off! 1. CHECK AND DOUBLE-CHECK THE OCCUPANCY AND BACK RENT BALANCES OWED! Just because an owner has a 60%, 80%, or even 100% full building doesn’t mean their tenants are paying rent. A while back, I was looking at a 150- unit project and found out that half of the tenants were at least a month late! Let’s just say that

changed the dynamics of the deal pretty quickly. So, make sure you get proof that the units are occupied and that rent is being paid! 2. MAKE SURE YOU LOOK AT ALL OF THE UNITS OR AT ALL OF THE PROPERTY. Don’t fall for lines like, “We can’t get into their unit because we don’t have permission,” or “The unit is locked, and I don’t have a key.” They’re just excuses! You don’t need any surprises that will cost you money later, so no matter how large the property is, always look in every unit. 3. GET MORE THAN ONE LENDER READY TO FINANCE THE DEAL. If you require some type of financing, make sure you have more than one lender quoting the deal for you and working it, too. You never know when a lender will get cold feet at the last minute and back out. Plus, you could find a huge difference in terms. For example, right now I‘m working on

redoing a 120-plus unit project that my partners and I own. Here are the three interest rates I’ve been quoted so far: 3.85%, 3.95%, and 4.25%! Here’s the big takeaway: Use common sense and take your time ! You can rush to get the property tied up and under contract, but whatever you do, don’t rush through your due diligence. Don’t let these “troubled” property owners dump their problems on you, no matter how good the deal looks! I covered some of these tips already in our last Heartland Investment Summit, but I have plenty more to share! To sign up for the next summit, visit HeartlandInvestmentSummit.com.

–Darin Garman

2 DARINGARMAN.COM

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